Hewlett Packard Enterprise Is an All-In Buy

Here's the prediction: a rise of 7% to 10% in the next few weeks.
By Richard Saintvilus ,

It's now time to go all in on Hewlett Packard Enterprise (HPE) - Get Report  because its chart points to a rise of 7% to 10% in the next few weeks.

HPE has been a profitable trade ever since the company in May delivered second-quarter earnings. Getting in and out quickly with each $2 swing have made investors and traders tons money. Now the next move looks higher still. Why? HPE has more room to run, as seen in this TradingView chart.

HPE is trading around $18.56 Thursday after a close of $18.40 Wednesday. The stock, which on July 1 reached a high of $18.64, has sufficiently broken resistance at my target of $18.50. The stock has reclaimed support at its 20-day and 50-day moving averages at $18.62 (the blue line) and $17.56 (the pink line), respectively, and is now firmly above the 100-day moving average at $16.88 (yellow line). This combination has raised the stock's support level to around $18.31.

This means resistance is now at $19.76, or about 6% higher. Assuming the stock can break that level, the next move higher would be $20.50, translating to another 10% rise.

Even with the most recent 10% gain from its recent low of $16.97, the shares are still cheap, trading at under 10 times fiscal 2016 estimates of $1.88 per share. This compares favorably to a price to earnings multiple of 17 for the S&P 500I:GSPC  index.

In short, from a risk-versus-reward perspective, HPE has more tho gain than to lose in the second half of the year. If you're looking for a solid entry point, the chart says now's your opportunity.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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